Friday, April 29, 2011

Like a vampire that seeks to suck the lifeblood from humans and refuses to die until a stake made of wood or silver is driven through its heart, the sale of California’s most prized state buildings refuses to go away.

First conceived by ex-Gov. Arnold Schwarzenegger in late 2009 as a means of raising extra bucks for one-time stopgap relief of the state’s chronic budget woes, the proposed sale of 11 buildings involved choice structures like the San Francisco Civic Center, the red granite Ronald Reagan State Building in Los Angeles, the Attorney General Building in Sacramento and the Rattigan Building in Santa Rosa.

As originally planned, the sale was to bring in about $2 billion at today’s depressed real estate price levels, with about $630 million going toward deficit reduction. The state committed to lease back all the buildings for at least 20 years at whatever the market rates of the future might be.

This plan was obviously rotten from the start. Even the economic analysis of the sale done by Schwarzenegger’s pet economists predicted a net loss to the state of $1.78 billion over 20 years and $2.8 billion if the leasebacks continued for 30 years. So the deal really was like a vampire that threatened to suck California’s fiscal lifeblood for decades to come.

It was a classic case of Schwarzenegger’s short-sighted approach to government, where deficits and other problems were temporarily papered over without even seeking long-term solutions, that task left to those who would come later -- us, now.

The Schwarzenegger approach included $15 billion worth of budget balancing bonds issued in 2004, bonds which will eventually be repaid for about twice the money they brought in – which was spent long ago.

After this column first pointed out the penny-wise, pound-foolish nature of the building sale in February 2010, protests slowly built and a group of former building officials eventually filed suit to stop the transaction.

Schwarzenegger proceeded with the sale process anyway, a firm called California First LLP eventually bidding $2.33 billion for the buildings and the state accepting the bid. But the sale was never consummated despite the signing of a purchase agreement last Nov. 15.

Schwarzenegger intended that paperwork to cement the deal before he left office Jan. 2, but his successor Jerry Brown ordered the sale quashed less than a month after taking office. Even though the deal in its final shape would have produced $300 million more than originally estimated, Brown believed the long-term losses should not be tolerated.

Essentially, Brown claimed the purchase agreement merely began an escrow process, which could be stopped before it was finalized. In fact, California First – whose main partners include the Irvine-based firm ACRE LLC (a wing of an outfit called Antarctica Capital), Hines Inc. of Houston, Texas, plus nine other investment and real estate firms in lesser roles – never took possession of any building.

But the partnership, which loves the idea of billions of dollars in assured profits over at least 20 years, didn’t give up just because Brown ordered the deal ended and moved some other state funds around to make up for the one-time $630 million payment Schwarzenegger had figured would enter state coffers. The partners sued.

“The state negotiated and signed a contract with California First and has no right to back out of the deal,” said the investment group’s Los Angeles lawyer, Stuart Liner. “California First met its obligations every step of the way and we intend to compel the state to live up to their (sic) end of the contract.”

Liner’s challenge indicates the investors have no interest in helping California’s financial future, but simply want to line their own pockets.

The suit, claims Eric Lamoureux, spokesman for the state’s building management agency, the Department of General Services, “is frivolous and wholly without merit. We are confident we will prevail when the facts surrounding…the purchase and sale agreement are brought out in court.”

Lamoureux one year ago was touting alleged benefits of the sale for the state (reductions in maintenance costs, paying off the bonds that built the buildings). Now he says “Escrow never did close because the lawsuit…prevented the state from finalizing the transaction. The lawsuit was still in place this year when Gov. Brown cancelled the sale…”

Brown’s cancellation was no surprise since he promised while campaigning last year to review the sale. That pledge was one reason the purchase agreement was hustled through almost immediately after the bidding process.

As with the overall budget, Brown says he’s seeking long-term solutions and not short-term Band-Aids that merely “kick problems down the road.”

But this bad deal is not dead yet, and with billions of dollars at stake, bet on the California First lawsuit lasting several years at a minimum.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

There were a lot of questionable actions and policies during the seven years Arnold Schwarzenegger was governor of California, many at least bordering on outright corruption. All the suspicions about one of the last of those acts have now been confirmed by the man who once gleefully adopted the sobriquet “governator.”

This move came only moments before Schwarzenegger was termed out of office, departing with a legacy of failure in his avowed aims of restoring both fiscal integrity and public faith in state government.

At the 11th hour of his term, Schwarzenegger commuted the prison sentence of Esteban Nunez, convicted of voluntary manslaughter in the 2008 stabbing death of a San Diego State University student, reducing his term from an already light 16 years to seven.

Nunez, the son of former Democratic Assembly Speaker Fabian Nunez, who often seemed like Schwarzenegger’s lapdog while they hobnobbed across the state, had bragged to his co-criminals that his daddy would get them off easy. The younger Nunez caught a major break when he was charged with manslaughter, not murder.

All he did, his lawyers argued, was hold the victim – 22-year-old Luis Santos – while others knifed him. Is that all?

At the time he cut the sentence, Schwarzenegger said nothing about it. Now he has. In a remarkable interview with Newsweek magazine, the ex-governor and onetime muscleman (muscles much reduced these days, seemingly diminishing in concert with his reputation) blustered that Esteban Nunez was right. His daddy did get him off easy.

“I feel good about the decision…I happen to know the kid really well,” Schwarzenegger said. “There’s criticism out there…because of our working relationship and all that. It maybe was kind of saying ‘That’s why he did it.’ Well, hello! I mean, of course you help a friend.”

There it was, Schwarzenegger’s first outright admission of a gubernatorial decision made strictly out of cronyism – a longstanding form of political corruption. This longtime actor made it plain he believes government should run like show-business, where children of stars and directors (examples: Gwyneth Paltrow, daughter of director Bruce Paltrow, and Kate Hudson, daughter of Goldie Hawn, and Liza Minnelli, daughter of singer Judy Garland and director Vicente Minnelli) often get first crack at becoming stars on their own. Who you know helps greatly as they showcase their talents before others get a chance. By contrast, the 14th Amendment to the Constitution requires government to treat everyone equally.

Schwarzenegger’s admission immediately raised questions about his seven years at California’s helm. Among them, two are the most relevant: What other friends did he help? What did it take to become a Friend of Arnold?

For sure, the Nunez commutation was far from the first Schwarzenegger move that looked corrupt on its face. There was his reduction of the vehicle license fee on his first day in office, a move that vastly benefitted car dealers who largely bankrolled his 2003 recall election campaign and still costs the cash-strapped state about $5 billion a year. A payoff? There were moves favoring developers, casino Indian tribes, oil and chemical companies and many other big money contributors to his political funds. Sure, Schwarzenegger spent some personal money on his campaigns, but others put in more and were often rewarded. Schwarzenegger had virtually promised they would be, observing while he declared for office that political donors expect significant returns on their investments.

It was just the kind of behavior that led to the recall of ex-Gov. Gray Davis, but Schwarzenegger did it with far more style, so he still hasn’t paid a price. Even now, after his Nunez admission, he’s an honored guest at conferences on the environment and immigration and gets movie project offers.

The lack of consequences is reminiscent of his time as governor. He promised to hire a private investigator to look into his acknowledged longtime womanizing, exposed just before the 2003 election. He never did, and paid no price.

When this column exposed how his appointees approved huge price increases for a water company owned by the Chevron oil company – one of his largest donors – nothing happened.

Now Schwarzenegger acknowledges only that the lack of prior notice given the victim’s family in the Nunez commutation violated state law. “My office definitely made a mistake…,” he conceded.

Chances are there will be no consequences for that either.

All of which leaves strong implications of frequent and serious wrongdoing throughout Schwarzenegger’s administration. Unless he willingly answers questions about all this, those implications should forever stain the ex-muscleman, ex-governor’s reputation and legacy.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Saturday, April 23, 2011

It’s only fairness. Democrats ought to let California Republicans have a voice in picking their party’s presidential candidate next year.

It really doesn’t matter who the GOP might choose. No one expects Democrats to like or vote for that choice. But letting this state’s millions of Republican voters have the same voice in their party’s affairs that Democrats have enjoyed for the last decade-plus is good for California. And denying them that voice could not only be bad for California, but would surely engender more of the same kind of inter-party rancor that so often handcuffs state government at critical junctures.

Here’s what’s happening: California law now sets the state’s presidential primary in early February, the same time it was held in 2008. But new rules adopted by the national committees of both major parties say the soonest California may stage a primary that will count for anything is March 1. Failure to change the date would automatically disqualify half the state’s delegates to both parties’ national nominating conventions.

So there has to be a change, and a bill to switch the presidential primary date is now moving through the Legislature. But rather than choose a date in March, the current measure would consolidate both the presidential vote and the regular bi-annual state primary election on the first Tuesday of June, 2012.

That may seem fine to Democrats, whose presidential nomination now appears likely to go almost automatically to incumbent President Barack Obama. This makes it irrelevant when Democrats vote.

But the timing of the vote by California Republicans could prove hyper-important. That’s because this state will have about 20 percent of the national convention delegates needed to nominate a Republican for President next year and will probably give almost all its delegates to whoever wins the most votes here, under the GOP’s winner-take-all-by-congressional-district system (in contrast to Democrats awarding delegates in direct proportion to the votes each candidate wins).

It’s most likely that whoever wins California’s GOP vote overall would take the vast majority of congressional districts, as John McCain did in 2008, when rival Mitt Romney won just three out of 53.

Such an enormous delegate haul – if it comes early in the process – can give California a lot of clout with Republican presidential prospects. Wrote Ron Nehring, immediate past chairman of the state Republican Party, “A legislator in a state with an early primary or caucus can get a call returned from any presidential candidate of his own party if he wants. If you’re in the unlucky state that votes late, you’ll be lucky if a junior intern returns the call – in 2013.”

So an early primary is the best way to ensure that a possible next President knows something about California and its problems, from budgets to water or immigration to education. An early vote also assures candidates spend time and money here, at the same time it forces them to become familiar with the state. All those things can only be good for all Californians, Democrat and Republican.

These, of course, were the very arguments Democrats used in 2007 when they convinced Republican ex-Gov. Arnold Schwarzenegger that he needed to sign their bill moving the 2008 primary up to early February. Schwarzenegger did it right away, with no GOP objections. It’s simple fairness for Democrats to return the favor.

Here’s one indication of how important the early date can be, when combined with the Republicans’ modified winner-take-all system for awarding delegates:

Hillary Clinton won the Democratic primary here three years ago, but got barely over 50 percent of California’s delegates to her party’s nominating convention. Had she won almost all, there’s a good chance she would be President today, rather than Obama.

For a huge boost in Clinton delegate numbers like California gives its primary victor in the GOP’s slightly modified winner-take-all system would likely have discouraged Obama’s backers. But hold the primary late, or last, and the chances are strong everything will have been decided before the state votes.

No late primary here after 1972 had the slightest effect on the nominations of either party until California moved its primaries up in the late 1990s. But when California went last time for McCain, it cinched the nomination for him.

Democrats setting the presidential primary back to June say they want to ensure the state holds just two statewide elections next year, rather than the three staged in 2008. So, yes, it makes some fiscal sense to consolidate.

But when all primary voting was consolidated into March in prior presidential years, state candidates still managed to file in plenty of time and nothing was seriously disrupted. Not even the confusion and legal wrangling likely to follow the August release of California’s the new redistricting plan should change that.

All of which makes the Democrats’ move toward taking California Republicans out of any position of influence in their national party look mostly vindictive.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

The best two things that could happen in American politics would be cutting or removing altogether the corporate and labor union campaign contributions that are the most significant sources of corruption in both national and state government.

U.S. Supreme Court decisions that hold donations by these wealthy special interests are protected by the Constitution’s free speech guarantees dictate that anyone wanting to diminish their influence over politicians must pursue something other than an outright ban or even a cap on the special interest spending.

In California, that effort last year took the form of an Assembly bill that would have forced corporations to report all their political activities and spending to shareholders, who could then have nixed a proportionate amount of that spending equal to their ownership stakes.

In short, if a shareholder owned 1 percent of all stock in the Exxon-Mobil oil company, he or she could demand the company cut its political spending by 1 percent.

It’s an idea very similar to what outgoing Gov. Arnold Schwarzenegger tried to impose on labor unions via the Proposition 75 ballot initiative in a 2005 special election. Back then, when Schwarzenegger was a political rookie still willing to take on major special interests, he tried to allow public employee union members to opt in or out of letting their dues be used for political contributions.

“There’s a fundamental unfairness in California,” went the ballot argument for the measure, which failed. “Hundreds of thousands of public employee union members are forced to contribute their hard-earned money to political candidates or issues they may oppose.”

There was truth to that argument, but it lacked balance. The clear-cut aim of Proposition 75 was to truncate the influence of the California Teachers Association and other unions representing prison guards, nurses, police and firefighters, which usually are leading contributors to Democratic candidates.

Just last fall, public employee unions were among those that funded independent expenditure radio and television commercials backing Democrat Jerry Brown in his run for governor at a time when he didn’t want to touch his own campaign war chest.

No doubt, Republicans like the signers of the pro-75 ballot argument would have loved to stymie that.

But this column and others argued in 2005 that it would be unfair to cut union influence while leaving corporations unfettered.

Former Democratic Assemblyman Pedro Nava of Santa Barbara, a defeated candidate for attorney general last year, picked up on that contention with the proposal to let shareholders cut corporate contributions. Given the fact that corporations provide a large part of Republican campaign funds in California, including support for numerous independent expenditure committees, the presumption was that the Democratic-controlled Legislature would pass this easily.

But it died in the state Senate’s Banking and Finance Committee, where four Democrats voted for the measure, when five votes were needed to move it along. Committee chairman Ron Calderon of Montebello, a Democrat, was one of three no votes (along with two Republicans), while Democrats Lou Correa of Orange County and Alex Padilla of Los Angeles did not vote.

“A corporation’s treasury shouldn’t be used to bankroll the political agendas of a few members of its board,” said Pedro Morillas, a consumer advocate for the California Public Interest Research Group, paraphrasing a bit from the ballot argument for Proposition 75.

If Californians are really interested in cleaning up this state’s politics and ending what many believe is governmental dysfunction, measures like both Proposition 75 and Nava’s defeated measure will be needed.

It would be virtually impossible to put both union member and shareholder vetoes of using their money for politics into a single ballot initiative because of laws that require propositions to cover only one subject area each.

But there’s nothing to prevent legislators from writing and passing companion bills accomplishing both aims. Nothing, that is, except pressure from the labor union and corporate interests who all too often call the shots in both Sacramento and Washington, D.C.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Saturday, April 16, 2011

Few documents have ever been more misleading than a 116-page U.S. Chamber of Commerce report this spring on how state employment laws affect job growth, a study that can be read as a direct attack on California and its employment laws.

For just one example: The Chamber ranks Mississippi high in its “good” category, while listing California dead last when it comes to the way state laws affect both hiring by private businesses and the creation of new businesses.

And yet…only 139 new businesses opened in 2009 (the most recent year the Chamber could study) in Mississippi, compared with 10,087 in California. This state contains a little over 12 percent of the national population, but 19.5 percent of all new businesses opened here, compared with Mississippi's .00026 percent. The California number, thus, far exceeds the state's proportion of the national populace, so some business people must believe things are not so bad here.

The full report can be read at http://www.uschamber.com/sites/default/files/reports/201103WFI_StateBook.pdf.

Why compare California and Mississippi? Because the Chamber chose Mississippi’s Republican Gov. Haley Barbour to present its report and because that report ranks California at the bottom in many categories, while laughably putting Mississippi near the top.

It’s not surprising that Barbour, a jovial former national chairman of the GOP, likely 2012 presidential candidate and forever a vocal booster of his state, immediately seized on the report to defend the fact that Mississippi has no labor laws going beyond the most basic federal requirements. No laws regarding how much notice companies must give before laying off workers. No laws on how companies handle unused vacation time accrued by employees. No minimum wage above the federal level of $7.25 per hour (California’s has been $8 per hour since 2008).

It was just about the first time anyone has ever given Mississippi a positive rating in anything. That state, after all, has the lowest per-capita income in America, the lowest life-expectancy and ranks last in the category of child welfare, according to the Annie E. Casey Foundation. Among other sad measures.

Barbour will surely use the Chamber’s high ratings for his state as part of his upcoming campaign. Don’t expect him to make much mention of the other realities.

The Chamber report doesn’t mention them, either, but some others are reading that report as a kind of reverse guide to how well-off citizens are in the many states. The lower the ranking in the Chamber’s employment-encouragement index, generally speaking, the higher the standard of living.

Where more than 25 percent of Mississippians live below the federal poverty line of $22,000 per year income for a family of four, that figure is barely 15 percent for California, despite its having by far the nation’s highest number of illegal immigrants, who are often paid below minimum wage. This suggests that many of the jobs that keep Mississippi’s unemployment rate right at the national average of about 9.7 percent (compared with 12.2 percent here) are extremely low-paid. That's despite the jobs in three new Mississippi factories Barbour loves to tout, plants opened by Toyota, General Electric and the Russian steel company Severstal.

One thing for sure: Regardless of how unfounded and unreliable the Chamber’s rankings of employment encouragement might be, this state’s Chamber of Commerce and other business lobbies will be using them for years in efforts to soften business-related regulations here.

But there is little or no evidence to back the claim that low minimum wages equal high employment. Washington state, for one, has America’s highest minimum hourly wage at $8.55 per hour, while Mississippi uses the federal minimum which is $1.30 lower. Yet Mississippi’s unemployment rate hovers around half a percent higher than Washington’s.

It’s interesting to note that keeping Mississippi company in the Chamber report’s “good” category are poverty-ridden states like Alabama, South Carolina and Texas (where more than 21 percent of the populace lives in poverty). Meanwhile, accompanying California in the “poor” employment encouragement category are states like New York, Oregon, Washington, Hawaii, Pennsylvania and Connecticut. Where would you rather live?

There are also plenty of economists critical of the Chamber study, saying many policies it claims are bad for job creation have little or no relation to creating jobs. One example might be laws protecting corporate whistle-blowers from firing. Another could be laws like the California measure that requires employees be given breaks for meals and rest.

There is, of course, another way to look at the entire report, to wit that it is intended as a tool for the Chamber’s member businesses to use when lobbying for lighter state regulations. In fact, that’s about the only sensible way to read it – which means anyone who takes this report to heart makes a big mistake.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

BY THOMAS D. ELIAS “KEEP FRENCH OFF HSR PROJECT UNTIL THEY PAY REPARATIONS”

Expect foreign companies galore to bid on major contracts for building components of California’s planned high speed rail system, the largest such project now planned anywhere in the world.

They will come from Germany and Japan and China, among others, because no American-based company now can of provide all the elements needed to build the required locomotives and cars. Some, like the German-based Siemens AG (largely owned by American pension and mutual funds) already have plants in California.

One bidder will almost certainly be Alstom Group, a huge French-owned firm that built all the engines and coaches for France’s smooth-as-silk TGV (Train a Grand Vittesse – or high speed train) network. The current chief executive of California’s High Speed Rail Authority, Roelof van Ark, previously was president of one wing of that company, Alstom Transportation Inc.

This outfit has built rail cars for the government-owned French SCNF national rail system since 1928 and is itself about 20 percent government owned after receiving a recession-related bailout.

But as good as Alstom’s machinery is, and as strongly as Van Ark may be associated with the firm, it should not be getting a nickel’s worth of work from California or any other American state until the SCNF – its corporate sister and biggest customer – begins paying reparations for its role in the Holocaust.

The link between the SCNF and the slaughter of most French Jews during World War II? SCNF trains carried more than 76,000 deported French Jews to Auschwitz and other Nazi death camps. More than 97 percent were murdered.

This was acknowledged in a sideways manner last winter, when SCNF president Guillaume Pepy told an audience in an old train yard near Paris that “In the name of the SCNF, I bow down before the victims, the survivors, the children of those deported and before the suffering that still lives.”

Oddly, Pepy never mentioned Jews, who made up more than 90 percent of those sent to their deaths, strictly because of their very birth. His “apology” reminded some of a memorial plaque placed a few years ago near the entrance of the Gare du Nord (North Station) in Paris, which acknowledges that “From here, thousands of loyal Frenchmen were deported to their deaths.” No specific apology to Jews, neither there nor in Pepy’s words. That's in keeping with the longstanding French government reluctance to acknowledge the country's well-documented role in furthering the Holocaust.

Also,nary a word about reparations payments, the sincere form of apology Germany has been paying Holocaust survivors for many decades.

Instead, Pepy pretended SCNF was a victim. “The SCNF…was forced and requisitioned as a cog in the Nazi extermination machine,” he said. “We will never forget it.” What he did apparently forget was the fact that the SCNF was paid both by the person and by the kilometer for each deportee it hauled.

“That was blood money and they’ve never paid a penny of it back,” New York lawyer Harriet Taumen charges. She has filed a lawsuit seeking reparation payments for 600 Holocaust survivors who were forced onto SCNF trains at gunpoint.

It’s undeniably true that some SCNF employees were resistance fighters and tried to sabotage the deportations, among other efforts. These included 1,647 SCNF personnel who were executed. But the rail firm’s management cooperated fully.

There are many in California who believe the state’s high speed rail plan is ill-designed and bound to be extremely inefficient. It has major flaws, not least of which are parts of its planned route.

But the chances are that high speed rail will become reality, in part because of intense interest from top levels of the federal government. Vice President Joe Biden voiced that enthusiasm the other day, comparing current plans to the original blueprint for the Interstate highway system. “We expect 80 percent of Americans to have access to high speed rail within 25 years,” Biden said.

President Obama has put cash where Biden’s mouth is, earmarking about $4 billion for the earliest work in California, to be done in the Central Valley, with $2.4 billion more possible soon. Another $9 billion in state bonds is available.

It would be a moral mistake to let any tainted company, domestic or foreign, have part of that largesse before it acts to rectify past misdeeds.

Alstom’s longstanding tight links to SCNF make it such a company. No bid should be accepted from French rail firms until and unless they move to divest themselves of any profits from their ferrying innocents to their deaths by the scores of thousands.

That divestment should take the form of reparation payments to those whose lives were taken or scarred, or their heirs, in a manner much like what has done since the 1950s by the German government and by companies which – like SCNF – profited from Nazi policies. Demanding anything less of Alstom and SCNF would simply be immoral.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Monday, April 11, 2011

No one in California politics believes this state is about to see anything like the unprecedented statehouse live-in occupation staged earlier this year in Wisconsin, where public employee unions faced the threat of losing not just salary and benefits, but their hard-won bargaining rights.

“Of course that won’t happen here,” say anti-union Republicans like Stephen Frank, the former president of the arch-conservative California Republican Assembly. “The unions already own the state Capitol here.”

By that, Frank and others mean that because public employee unions like the California Correctional Peace Officers Assn., the California Teachers Assn. and the Service Employees International Union were among the largest contributors to Gov. Jerry Brown’s 2010 campaign and also are prime funders of many Democratic state legislators, they will enjoy a free hand as long as their people stay in power.

But that’s not necessarily so. Just look at Los Angeles, where Mayor Antonio Villaraigosa – a former union organizer – frequently opposes the United Teachers of Los Angeles and other unions as he confronts both an underperforming school system and an unprecedented municipal deficit. Villaraigosa backed springtime ballot measures that increased the contributions of public employees to their pensions and has been forced to okay reductions in the city’s work force.

When public employees from police and schoolteachers to park rangers and social workers lose their jobs over fiscal issues, it’s hard to continue claiming union-backed candidates will never face up to financial realities.

No, Brown, who during his first go-‘round as governor in the 1970s signed a bill vastly expanding the bargains rights of public employees, will never join Wisconsin Republican Scott Walker in trying to roll those rights back.

But that doesn’t mean he will exempt them from cuts. Even while dealing with the state’s immediate deficit – which among other things will at the very least close some state parks, reduce the state’s prison population, exclude hundreds of thousands of university and college students and seriously cut in-home social services for the blind, elderly and developmentally disabled – Brown was proposing major changes to save money on public employee pensions.

His move will surely speed up a trend toward greater employee contributions deducted from paychecks. It will also likely mean a cap on the salaries that can be used to calculate future pensions and using an average of an employee's last three or five years' salaries as the pension base, rather than today’s practice of using the final year, which leads to “pension spiking,” as outgoing workers pad their last-year checks with extra overtime to increase their pensions in perpetuity.

Some of these changes will apply to current workers and not only to future hires, but it’s for sure virtually all these changes, and more, will apply to new workers.

So anyone who says Brown is essentially the property of the unions that helped him into office is dead wrong. What’s more, anyone who says that has not heard him talk to union bosses.

Here’s what he told David Sanchez, the president of the state’s largest teachers union, during one public meeting: “Our dilemma is that 60 percent of the people don’t want their schools cut, or fire or police,” Brown said. “But 60 percent also don’t want new taxes. That’s a problem.”

You bet it’s a problem, and by throwing it up to Sanchez, Brown was saying, “Your members will not be exempt from the consequences of the dilemma.”

That will be especially true if Brown can’t get the tax extensions he’s pushed since taking office onto a special election ballot sometime this year. If there are no extensions – or even if extensions do come – an internal memo from the Legislative Analysts office says there will surely be more hiring freezes, furloughs or even layoffs for state workers. And of course, voters two years ago rejected a tax proposal almost identical to what Brown wants.

The main difference between all this and Wisconsin is that Brown does not threaten to cut any union rights, just union members’ pay, benefits and maybe some jobs.

Yes, workers have often gone on strike against proposed give-backs of money and benefits, but in today’s California, it would be difficult for any public employee – union or not – to argue that some cutbacks are not needed.

The same reality plainly is hitting states from Texas to Wisconsin to Georgia, Nevada, Arizona and New Jersey, for just a few. It’s yet another example of how things that happen in California soon spread to the rest of America.

The bottom line: Expect no major confrontations between unions and California state officials. But at the same time, if you’re a public employee union member, expect major changes in your benefits and who pays for them.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

BY THOMAS D. ELIAS “TIME FOR BROWN, DEMS TO SAY YES TO SOME GOP IDEAS”

For years, Democrats have called California Republicans the “Party of No” because almost all they ever did was say “no, no, no” to Democratic budget plans and even those of former GOP Gov. Arnold Schwarzenegger.

But suddenly this spring, two Republican state senators presented a seven-page list of 53 things they want done before they’ll help solve the budget quandary. Instantly, Brown and the Democrats said “no, no, no” and a couple of days later, Brown loudly announced that he’s finished negotiating with the GOP.

Brown complained the list was too long, asking the two senators, GOP leader Bob Dutton of San Bernardino County and Bob Huff of Diamond Bar, to be “reasonable and focus on what is possible, on issues we’ve been talking about…It’s not time for diversions.”

But maybe now is a time to reconsider and talk about some items the two Republicans brought to the table. It’s also sensible to view the GOP proposals as items for negotiation, a way for the minority party’s members to vote for a solution but still be able to tell their base voters they’ve been fiscally responsible.

In fact, if they’re smart and really interested in problem-solving, Brown and other Democrats will give strong consideration to some points in the Dutton-Huff agenda. For there are many that don’t appear to conflict with Democratic principles and could introduce greater fiscal responsibility to state government. Some examples:

 Republicans suggest basing pensions on the highest five years of a public employee’s pay, rather the three which Democrats seek to retain.

 Don’t allow double-dipping, as when some (not many) full-time employees draw both salary and a pension from the same publicly-funded employer.

 Restore $10 million of state funding for Williamson Act contracts which guarantee that affected farmland will not be developed for at least 20 years, thus preserving open space and helping mitigate global warming.

 Move next year’s presidential primary election to March, where it has often been before, rather than holding it in June. A June date would give California Republicans almost no voice in picking their party’s nominee. Why not allow them that, and also move up the rest of the state’s primary voting to a consolidated March date?

These are just some of the items in the GOP wish list to which Brown and his fellow Democrats could easily accede without hurting themselves or their backers a bit.

In return, of course, the Democrats should expect Republicans to allow a special election vote this year on extending three tax increases passed as part of a budget compromise in February 2009. Those hikes to sales, vehicle and income taxes have cost the average California family about $28 per month. Brown needs the extension to avoid designing an all-cuts solution to the current budget deficit, which stands at a bit more than $10 billion even after Democrats passed a slew of budget bills last month chopping $14 billion from previous spending.

Agreeing to some of the Republican agenda, of course, doesn’t mean caving in to all of it. One thing Brown and his fellow Democrats would be foolish to go along with is gutting the California Environmental Quality Act (CEQA), which since the early 1970s has demanded thorough environmental studies before major development projects can go forward.

Republicans and the big-business lobby consistently claim that law costs the state thousands of jobs and billions of dollars in tax revenues. It may have cost some jobs -- not many -- and it definitely has delayed some developments. But it has also spared the state’s rivers from massive pollution and is one major reason air quality is far better today almost everywhere in California than it was 30 years ago.

But at the same time, some GOP items related to CEQA make sense. Why not, as Republicans suggest, dispense with most environmental studies when retrofitting abandoned “big box” stores, like the derelict former Gottshalk’s facilities in some Central Valley cities? Why not make it easier to get permits for urban in-fill building than for projects in areas never previously developed?

The bottom line: Some of the Republican agenda makes sense, even if as a whole it’s probably too extremely laissez faire and too tough on public employees to be considered either fair or environmentally sound.

By presenting the list, Republicans said they’re ready to negotiate. Brown and the Democratic legislative majority would be wise to reciprocate, and begin by cherry picking the wisest items from the GOP list.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Tuesday, April 5, 2011

For the umpteenth time in the last 20 years, the extreme conservative activists who run California’s Republican Party have shot themselves in the foot. They have, that is, if they’re more interested in winning elections than merely retaining control of their own dwindling party’s apparatus.

The latest self-destructive move came at the party’s late-winter state convention, where activist delegates voted to stage an end-run around the “top-two” open primary election system that now allows all voters to cast ballots for any candidates they like, regardless of party. That system gets its first large scale test in the statewide primary set for next spring.

Here’s what the delegates decided: The GOP will send mail ballots to all the party’s registered voters starting in April or May of 2014, asking them to decide which candidates the party should endorse in the primary that June. The party – which has never previously endorsed in its primaries – can then throw support and money to those candidates.

Here’s the big problem (assuming this scheme ever comes off): Casual voters are less likely than die-hard conservatives to return those mail ballots, which means the party’s right wing figures to continue to dominate party choices, as it has in virtually all GOP primaries of the last 20 years. This has produced almost nothing but Republican defeats.

The difference between die-hard voters and the general electorate has been clear in every special election of the modern era – many fewer voters turn out in those elections and the outcomes have tended to favor conservatives and their causes more than general election results, where casually-interested voters are more likely to express their preferences.

All-mail balloting where voters must supply their own postage will tilt even further to the right than special elections or the Republican primaries of the past.

So virtually all candidates the party endorses from 2014 onward will most likely be extreme conservatives of the sort that are unlikely to win election in a state where Democrats outnumber Republicans by almost a 3-2 margin (44.6 to 30.1 percent in the latest count).

If that were all there was to it, this would mark no change at all for the GOP. It would be backing essentially the same kind of candidates who have lost every top-of-ticket race – except those involving Arnold Schwarzenegger – since 1994, and most lesser contests as well. Meanwhile, the party honchos expect to keep control of what little is left of their party these days.

But there may be more to it. For when primary election day (or absentee ballot-marking time) comes around, it won’t just be Republicans voting for Republicans anymore. Democrats will be able to vote for Republicans if they choose.

In districts where Republicans hold sizeable majorities – under the upcoming new redistricting plan, there will surely be some of those in places like Orange and San Diego counties and the largely un-urban counties of north-central California – at least some of the Democrats present will choose to vote for a moderate Republican in the primary if they believe such a candidate has a chance to make a runoff between the top two primary election vote-getters.

So the mere fact that the party’s most conservative elements back one candidate and award him or her the party endorsement might not scare off others. If other Republican candidates stay in, Democrats might become more likely to vote for a Republican bucking the party establishment than they would for many others.

When an upstart candidate like that manages to build a coalition of moderate Republicans and Democrats, the endorsed Republican just might lose an all-GOP top-two runoff. That, of course, is just what the open primary is designed to do – create more opportunities for moderates in both parties to form coalitions across party lines.

If and when that happens, that winner will automatically become a Republican state convention delegate with the power to appoint or influence the selection of others.

So the conservative Republican establishment may have set up a chain of circumstances that could eventually turn their party more moderate and get rid of the conservative clique that’s dominated it for many years.

Which would surely be a classic example of self-interested politicians shooting themselves in the foot.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Once again, a logical solution to California’s estimated $25 billion budget quandary stares the state in the face. The money needed to keep all services going, pay all state employees and met pension obligations now sits in government hands.

Back when the deficits ran only about $9 billion to $10 billion (those good old days were only about three or four years ago), it became clear that changing a few of the property assessment rules passed to facilitate the 1978 Proposition 13 tax cuts could solve much of the problem. This could still solve a bit of the problem, but nowhere near all of it.

But the cash that now lines the pockets of a bunch of special districts that are generally unwilling to share their wealth could do almost the entire job.

What are these special districts and where do they get their big bucks? We’re talking about water districts, irrigation districts, publicly-owned bus companies, sewer districts, sanitation districts, hospital districts and more. For the most part, these outfits get their money not from taxes, but fees. In many places, if you want your garbage collected, you pay the sanitation district. If you want water to come out of your tap or your garden hose, you pay the water district. If you want to ride a bus or trolley, you pay the fare.

Altogether, the 250 wealthiest special districts in California had cash holdings of $41.3 billion entering last year, after paying all expenses, money gathered over decades of operation and sitting in bank deposits or other investments. The Orange County sanitation district, for one, had “retained earnings” of $1.35 billion. The same county’s water district had $1.2 billion in reserve.

If any city or county possessed that kind of cash reserve, taxpayers would be up in arms, demonstrating in the streets before district headquarters to demand lowered fees and some kind of distribution of the excess money.

When many cities have a bit of extra cash – nowhere near these sums – they donate at least some of it to the local schools to help prevent cuts.But with the special districts, there’s nary a peep from anyone. And there’s no movement by their elected boards to use that extra money for anything or helpful. Nope, they’d rather sit on the money, pleading possibly future infrastructure needs.

Water districts justifiably say they never know when they’ll need to repair a burst line that might create a sinkhole in the middle of a major boulevard. That’s happened many times. Money also must be available for sewer repairs, new buses.

In fact, reports the Orange County Register, about half the money is reserved for specific projects or future debt payments. That still leaves about $20 billion unspoken for. No one knows how much the districts might eventually need for repairs to buildings and other equipment, but for sure they won’t be spending $20 billion on those items anytime soon. Let’s say, choosing a random figure, that they might eventually need $5 billion for repairs, above and beyond their planned budgets. That leaves $15 billion that could be handed over to the state – enough to solve 60 percent of the budget problem.

But the state can’t touch the money on its own. It can’t dun the districts as it did city redevelopment agencies over the last two years. And any hope that the state ever could demand the districts’ reserves diminished considerably with last fall’s 60-40 percent passage of Proposition 22, which aimed to keep most local tax revenues in local government hands.

And yet… state government has a lot of power. Gov. Jerry Brown and the Legislature could threaten to withhold other money from areas where special districts don’t offer some of their reserves to help the state out of its jam. Brown could threaten to withhold federal grant money of various types that is allocated by the state.

In short, the governor has plenty of jawboning power. If local voters saw other government services like police and fire protection, schools and road maintenance begin to suffer because special districts refuse to contribute toward helping the state as a whole, it’s possible they might rise up and vote out some district board members.

Political reality, then, means that the special district money is not as untouchable as some laws might suggest. It’s really a question of how tough the governor and the Legislature might be, how much of a battle they wish to fight.

With major cuts to public schools, police forces and health care for children without insurance in the immediate offing, they just might have some incentive to do some far more heavy-handed negotiating than this state has ever before seen. That’s probably what it would take to get at the huge pot of money that’s sitting in the district coffers.

-30- Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

About Me

Thomas Elias writes the syndicated California Focus column, appearing twice weekly in 93 newspapers around California, with circulation over 2.2 million.
He has won numerous awards from organizations like the National Headliners Club, the California Newspaper Publishers Association, the Greater Los Angeles Press Club, and the California Taxpayers Association. He has been nominated three times for the Pulitzer Prize in distinguished commentary.
Elias is the author of two books, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It" (now in its third edition; also published in Japanese and recently optioned for a television movie) and "The Simpson Trial in Black and White," co-authored with the late Dennis Schatzman.